Right to arrest under a slot charter. the "Tychi" case

SC Mediterranean Shipping Company SA v

The Owners of the Ship "TYCHI" ("the Tychi")

The vessel operator claimed sums due or damages arising out of a breach of its agreement with the slot charterer. In support of its claim, the operator arrested "the Tychi", a vessel beneficially owned by the slot charterer. The slot charterer applied for release of the vessel, which was refused. The slot charterer appealed.

Issue

Whether the plaintiff was entitled to bring an action in rem against "the Tychi" under sections 20 and 21 of the Supreme Court Act 1981.

Held

It was common ground that in order to bring an action in rem against "the Tychi", the plaintiff had to establish all of the following:

that the claim arose out of an agreement relating to the carriage of goods in a ship or to the use of a ship;

that the claim arose in connection with the ship; that the defendant would be liable on the claim in an action in personam;

that when the cause of action arose the defendants were the "charterer" of the ship; and

that at the time the writ was issued, the defendants were the beneficial owners of "the Tychi" (not the ship in connection with which the claim arose).

The first, second and fifth contentions noted above were accepted. The third was assumed to be correct for the purposes of the appeal. The question turned therefore on the fourth issue.

The defendant conceded that the meaning of the phrase "charterer" of the ship in section 21(4) of the Supreme Court Act 1981 was not confined to a demise charterer. The decision in the Span Terza [1982] 1 Lloyd's Rep 225 was authority for the proposition that "charterer" includes a time charterer. The purpose of the statute was to ensure that a person whose ship was arrested had some relationship with the ship in connection with which the maritime claim arose. In the case of a sister ship, the ship being arrested must be wholly beneficially owned by the person liable in personam.

If "charterer" included a time charterer, it must also include a voyage charterer. Once "charterer" extends to a voyage charterer, there can be no good reason for excluding a voyage charter of part of the ship. There is no distinction in principle between a slot charter and a voyage charter of a part of a ship. The reasoning leading to the conclusion that the voyage charterer is a "charterer" also leads to the conclusion that the slot charterer is such a "charterer".

The Appeal was dismissed.

Court of Appeal (Civil Division)

Otton L.J., Walter L.J., Clarke L.J. - 31.03.99